Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 15,000 cases of beer were sold every week at a price of $7 per case. After the tax, 10,000 cases of beer are sold every week; consumers pay $9 per case, and producers receive $6 per case (after paying the tax). The amount of the tax on a case of beer is ($_______) per case. Of this amount, the burden that falls on consumers isper case, and the burden that falls on producers is ($______) per case. True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on consumers.
Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 15,000 cases of beer were sold every week at a price of $7 per case. After the tax, 10,000 cases of beer are sold every week; consumers pay $9 per case, and producers receive $6 per case (after paying the tax). The amount of the tax on a case of beer is ($_______) per case. Of this amount, the burden that falls on consumers isper case, and the burden that falls on producers is ($______) per case. True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on consumers.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 15,000 cases of beer were sold every week at a
The amount of the tax on a case of beer is ($_______) per case. Of this amount, the burden that falls on consumers isper case, and the burden that falls on producers is ($______) per case.
True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on consumers.
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